At the Future China Global Forum in Singapore, Bridgewater Associates founder Ray Dalio cautioned that the U.S.’s $37.5 trillion debt could trigger a "crisis." The billionaire hedge fund manager has previously warned of a potential “debt-induced heart attack” within the near future.
Dalio emphasized that, despite growing concerns over fiscal sustainability, the U.S. is unlikely to implement substantial spending cuts.
Administration Shows Greater Debt Recognition
The 76-year-old billionaire emphasized the U.S. “cannot cut back on its spending for various reasons,” creating a dangerous fiscal trajectory, Fortune reported. He attributed the debt challenge to “human nature” rather than partisan policy failures.
"Speaking with Secretary Bessent and people in the administration, there is a greater realization of these problems and greater proactiveness to be able to deal with them than there was before, by a lot,” Dalio stated.
Spending Cuts Unrealistic as Market Demand Weakens
The billionaire emphasized the U.S. “cannot cut back on its spending for various reasons.” Congressional Budget Office projections show 2025 spending at $7 trillion against $5 trillion revenue, widening to $10.7 trillion versus $8.03 trillion by 2035. “The market does not have that same demand for that debt, creating a supply-demand imbalance,” Dalio explained.
He previously warned that without corrective action, “big, painful disruptions will likely occur,” projecting debt per family could surge from $230,000 to $425,000 over the next decade
Revenue Solutions Target Fiscal Gap
The Trump administration has put forward ideas to raise revenue, including tariffs and “Gold Cards” that would cost wealthy immigrants $5 million for faster citizenship. Trump suggested that selling millions of these cards could raise $50 trillion.
Dalio, speaking at the Singapore forum, warned that with $1.13 trillion in annual interest payments, the market's demand for U.S. debt is declining, creating imbalances in supply and demand.
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